more claims than Mangkhut’s US$395 million in payouts
Highly likely that the total claims due to the black rainstorm and Super Typhoon Saola might be higher than those caused by Typhoon Mangkhut, Asia Insurance CEO Winnie Wong says
A lot of claims are expected from the tenants of Temple Mall North, after rainwater flooded its basement
Submerged cabs in a flooded street in Hong Kong’s Tai Po district on Friday. Photo: Jelly Tse
Hong Kong businesses and vehicle owners might have to put up with higher insurance costs in future, with claims after torrential rains over the past two weeks likely to top the HK$3.1 billion (US$395 million) paid out in 2018 for damages caused by Typhoon Mangkhut, industry executives said.
The city recorded its longest black rainstorm warning ever, after the highest weather alert was issued late on Thursday and lasted for more than 16 hours. The rainstorm, which Hong Kong officials described as a ‘once-in-500-years’ event, left one person dead and 117 injured, including four in serious conditions. The storm came just a week after Super Typhoon Saola hit Hong Kong, leaving many buildings with broken windows.
“Whenever a huge number of insurance claims are made for a natural catastrophe, the reinsurance companies will increase the charge for reinsurance with the direct insurers and, hence, the cost of insurance is set to rise next year,” said Winnie Wong, CEO of Asia Insurance and governing committee member of industry body Hong Kong Federation of Insurers (HKFI). Reinsurance is insurance for insurance firms. It is a way for them to transfer to another company, the reinsurer, some of the financial risk that they assume when insuring vehicles, homes, people and businesses.
Wong said she expected a record-high number of claims from car owners, as well as owners of shopping centres and other properties.
“We have seen cars floating everywhere, in car parks or in the streets, while some shopping centres have endured serious flooding too,” She said. “It is highly likely that the total claims for car insurance, property insurance and business interruptions due to the black rainstorm and Super Typhoon Saola before that might be higher than those caused by Typhoon Mangkhut.”
Typhoon Mangkhut generated insurance claims of about HK$3.1 billion in 2018 for damages to properties and cars, and business interruptions. This is currently the highest sum of claims made for a natural catastrophe since records began in Hong Kong in 1988, HKFI data shows.